H

According to the article “EPA Knocks $900,000 Off Value of a Life”, which of the following methods of valuing a human life is used by insurance agencies and in wrongful death lawsuits?

All of the above

Suppose you have an hour of time available to you and you have four mutually exclusive things you can do with that hour. You can attend class, sleep, play video games or watch TV. Suppose that you place the following values on the hour spent in each of these ways; going to class is worth $110, sleeping is worth $100, playing video games is worth $95 and watching TV is worth $90. If you choose to go to class, what opportunity cost have you incurred?

$100

According to the textbook, when people make decisions on the margin:

All of the above

According to the article “Booze Tax Could Make Us All Healthier,”

The effect of an alcohol tax may differ depending on culture.

Jill and Mary are roommates. Mary is a smoker and Jill is not. Jill places a value of $150 on having a smoke free home while Mary places a value of $300 on being able to smoke at home. Which of the following arrangements could make both happier?

Mary could pay Jill $160 for permission to smoke in their apartment.

Which of the following could result in a market failure?

1) Imperfect information

2) Externalities

3) Imperfect competition

4) All of the above

5) None of the above

According to the article which referenced TSA screening for air travelers, the present system of TSA screening which allows airlines to give preferred screening to first-class passengers, is:

anti-egalitarian

Empirical research shows that there is a positive relationship between the price of a product and the quantity producers would like to supply to the market. We call this the Law of Supply. According to this law, what happens when price rises?

We see an increase in quantity supplied but no change in supply.

According to the article “How to Keep the Public Shopping,” which of the following statements is true?

1.People who are feeling sad are more likely to reduce selling price of a good than emotionally neutral people.

2.People who are feeling sad are willing to pay more for a good than emotionally neutral people.

3.Disgust reduces both selling and buying prices.

4.Happy people are willing to pay more only when buying a good but not when selling a good.

5.Only (1), (2) and (3).

According to the textbook, what is the summation of all of the individual consumer demand curves?

Market demand.

According to the article “The Futility of Price Controls,” prices of which of the following goods cannot be controlled for any length of time?

1.The prices of farm commodities due to their dependence on the weather

2.Prices of energy and raw materials due to their co-movement with international prices

3.Prices of exported goods due to implied stupidity of giving foreigners a gift of lower price on exported goods

4.All of the above

5.None of the above

Suppose we observe a 15% increase in the price of train travel which leads to a 7.5% reduction in the demand for bus travel. Based on this information we can predict that:

Travelers consider train and bus travel to be complements but there is a weak or inelastic relationship between the two.

Which of the following government policies can be considered to be a form of price control?

1.Minimum wage

2.Rent control

3.Agricultural price supports

4.All of the above

5.None of the above

16. According to the article “The Rock and the Hard Place on the Deficit,” why does conventional analysis underestimate the effects of tax changes on the economy?

Because conventional analysis links the tax changes to what is happening in the economy.

Suppose the government places a tax of $10 per book on sellers of textbooks and as a result we observe an $8 increase in textbook prices. Based on this information we can predict that:

|Ed|<Es

According to the article ‘Driving Directions: What to Charge for a Charge?’ what should be taken into account when determining the appropriate price for a charge?

1.Higher prices can discourage public charging.

2.How high the charging price is relative to the price of gasoline.

3.High price can wipe out the savings inherent in operating an electric vehicle.

4.All of the above.

Suppose the market for a product has an equilibrium price of $6 and an equilibrium quantity being bought and sold equal to 100,000 units. If the government decides to offer a $3 per unit subsidy to the buyers of this product and we observe that the equilibrium price rises to $7, then we know that:

Ps has risen to $7, Pb has fallen to $4 and |Ed|>Es

Which of the following is not an explicit cost of production?

The rent a business owner cannot earn when she uses for her business a property she

personally owns.

Suppose APL=14 and MPL=16 when 7 workers are hired. What can we expect to happen to APL when we hire the 8th worker if his MPL = 17?

APL will increase, but will still be less than 17.

Which of the following describes the marginal cost of production?

MC refers to the additional cost associated with producing one extra unit.

According to the article “EPA Knocks $900,000 off Value of a Life”, which of the following methods of valuing a human life is used by insurance agencies and in wrongful death lawsuits?

1.Earnings capacity: how much money could the person have earned?

2.How much could the person have contributed to society?

3.How much was the person loved by family and friends?

4.All of the above.

5.None of the above.

Which firms are most likely to engage in advertising?

Imperfectly competitive firms

The article entitled “The Future of Agriculture May Be Up” discusses the growing trend of vertical farming. From an economic point of view, vertical farming results in:

A shift out of the production possibilities frontier as a country gains more “land” resource by creating land vertically rather than horizontally.

If a monopolist can price discriminate, its MR curve lies____ and if a monopolist cannot price discriminate, its MR curve lies ____.

On the demand curve; below the demand curve.

Which of the following best describes absolute advantage?

It is an ability to produce a greater amount of output with the same amount of resources.

According to the article “Chilly North Sea Comes Back to Life,” new technology is resulting in___.

Increased access to resources which is leading to a shortage of drilling rigs.

Which of the following is true regarding winners and losers from free trade?

all of the above

Regardless of whether world price of a good is higher or lower than the price of that good in a domestic economy, the domestic economy will experience ____ if it opens up to free trade with the rest of the world.

An increase in economic surplus

Absolute advantage

The ability to produce a greater output with the same number of resources

Suppose you are running a monopolistic firm and you are trying to decide how much to produce in order to maximize profit. You are currently producing 10 units and at this production level you find that your marginal revenue earned is $25 and your marginal cost is $20. You also cannot price discriminate. What level of production should you choose?

Produce more than 10 units

According to the article “Where Airfares are Taking Off,” when United Airlines and Continental Airlines merged, the average fare to between Houston and Chicago___ compared to the overall fare increase (which includes markets not affected by the merger) of ____ for the same time period.

57%, 16%

According to the article ‘A Taste of a Distant Home, Minus the Chopping,’ one of the problems facing individuals who wish to cook their traditional food specialties is that:

Some ingredients are hard to find

Flatter the curve, more responsive

Steeper the curve, less responsive

According to the article “The Rock and the Hard Place on the Deficit,”

Wealthier households typically pay more of a tax increase out of their savings than poorer households do.

Suppose that gasoline price is $3/gallon and you buy 30 gallons of gasoline per month. When gas price has risen to $3.6/gallon, your gas consumption decreases to 27 gallon per month. What is the price elasticity of your gasoline demand?

‐0.5

For the law of demand to be observed in a market, what factors should be held constant?

Consumer income and preferences

MC=MR

Always want to produce at this level

P < ATC

shut down

P > AVC

making a loss, but keep producing until you get rid of your fixed inputs

P < AVC

shut down immediately

Perfect competition

price takers

monopolies are

price makers

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

Which of the following should be considered by a rational person making a decision?

The probability of a cost or benefit occuring

Suppose Marcie currently makes $3 million in revenue charging $3 per chocolate bar and selling 1 million chocolate bars. If her Qs rises to 1.5 million chocolate bars and her customers’ Qd falls to 0.9 million at a price of $4 per chocolate bar, should she raise her price to $4 per chocolate bar if she wants to maximize her sales revenue?

Yes, her sales revenue will rise to $3.6 million.

According to the article “Can Firms Aim to Do Good if It Hurts Profit?” some producers want to make business decisions that consider the impact on the community and environment. From an economic perspective, we would say that these businesses want to make business decisions that do not maximize their_____ but that do maximize their _____.

Profit, economic surplus

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

Which of the following should be considered by a rational person making a decision?

The probability of a cost or benefit occuring

Suppose Marcie currently makes $3 million in revenue charging $3 per chocolate bar and selling 1 million chocolate bars. If her Qs rises to 1.5 million chocolate bars and her customers’ Qd falls to 0.9 million at a price of $4 per chocolate bar, should she raise her price to $4 per chocolate bar if she wants to maximize her sales revenue?

Yes, her sales revenue will rise to $3.6 million.

According to the article “Can Firms Aim to Do Good if It Hurts Profit?” some producers want to make business decisions that consider the impact on the community and environment. From an economic perspective, we would say that these businesses want to make business decisions that do not maximize their_____ but that do maximize their _____.

Profit, economic surplus

According to the article “Balancing Act: Lives vs. Regulations”, what do the economists Viscusi and Jones-Lee find?

Older people in both England and the United States tend to discount their own life.

Which of the following should be considered by a rational person making a decision?

The probability of a cost or benefit occuring

Suppose Marcie currently makes $3 million in revenue charging $3 per chocolate bar and selling 1 million chocolate bars. If her Qs rises to 1.5 million chocolate bars and her customers’ Qd falls to 0.9 million at a price of $4 per chocolate bar, should she raise her price to $4 per chocolate bar if she wants to maximize her sales revenue?

Yes, her sales revenue will rise to $3.6 million.

According to the article “Can Firms Aim to Do Good if It Hurts Profit?” some producers want to make business decisions that consider the impact on the community and environment. From an economic perspective, we would say that these businesses want to make business decisions that do not maximize their_____ but that do maximize their _____.